SANTA CRUZ -- A year after 75 River St. was occupied by activists angry about foreclosures, Wells Fargo reports "encouraging numbers" with fewer local homeowners in trouble and plans to increase hiring and small business loans, but its leased space at 75 River St. remains empty.

Of the 11,800 mortgages in the county serviced by Wells Fargo, 97 percent are current on payments, compared to 93 percent in San Jose, he said.

About 400 mortgage-holders serviced by Wells Fargo locally are two months' behind on payments and have received a notice of default, the first step toward foreclosure, compared to 1,000 countywide.

Rademann said it's taking 18 months from the default notice to the actual sale on the steps of county buildings, a period during which the homeowner is making no payments.

"We're doing a lot of (loan) modifications," he said, noting 10,000 bank employees nationwide are working on "home preservation."

The 160-year-old bank declined to jump on the adjustable mortgage interest-only payment bandwagon, but in buying Wachovia, which had purchased World Savings, it acquired a portfolio of $120 billion in "Pick-A-Payment" loans, 70 percent of them in California, he said.

The "Pick-A-Payment" portfolio is down to $75 billion, with Wells Fargo forgiving $3.25 billion in principal, according to Rademann, but these loans still have the highest delinquency rate.

"We're trying to refinance them," he said.

In October, recognizing the impact of foreclosures, he invited 22 local nonprofits to a breakfast at Severino's in Aptos, providing information on whom to contact for help and presenting each with a check for $1,500.

Wells Fargo ranks No. 1 in bank deposits in the county with $1.1 billion, thanks to its 2008 acquisition of Coast Commercial Bank. It's second locally for Small Business Administration loans.

The last fiscal year, Wells Fargo made four loans for $2.8 million -- including $1.2 million for KC's Sports Bar downtown remodel -- behind Santa Cruz County Bank's eight loans for $3.77 million.

"We have aggressive goals for next year," Rademann said.

Wells Fargo has senior credit officers in Santa Cruz who can make decisions on loans, he noted, and offers payroll and insurance services to business owners.

Locally Wells Fargo employs 105 people and plans to hire five more bankers next year, Rademann said.

He is planning to launch a "Small Business Renovation" project in the county next year. He tried it in San Rafael two years ago, allocating $3,000 for designers to make small yet significant storefront improvements at three small businesses to improve sales.

Buying Coast Commercial and its parent, Greater Bay Bancorp, boosted deposits, but the deal resulted in branches that duplicated efforts. Several were closed and sold.

Downtown, Wells Fargo inherited a lease for 75 River St., across from the headquarters it owns at 74 River St.

The lease, signed in 2001, runs until April 30, 2016, and contains an "escalator clause" raising the payment every year.

Wells Fargo proposed an extended lease at a reduced rate, which Proctor said was unacceptable. He said there have been "serious talks" with major retailers and a health organization about subleasing that went nowhere.

﻿Rademann said Wells Fargo plans a "big capital spend" to remodel its headquarters at 74 River St. in January and consolidate offices downtown, including 530 Front St., leased from Barry Swenson.

The bank applied for a permit for second-floor improvements, initially valued by building department at $383,000. Since the project is out to bid, according to the permit application, that may not be the final number.

Rademann said Wells Fargo added an ATM kiosk on the Westside after eyeing the corner retail space at Safeway's Mission Street shopping center snapped up by Chase.